Why is CVP analysis more difficult when using absorption costing than when using variable costing?
1) Fixed manufacturing overhead is ignored when performing CVP analysis.
2) CVP analysis requires costs to be broken down between variable and fixed which is not done in absorption costing.
3) CVP analysis requires costs to be broken down into product and period costs, which is not done in absorption costing.
4) Selling and administrative costs are ignored when performing CVP analysis.